Budget Cuts and Our Children's Future

Deficit hawks invoke the next generation, but an austerity program would balance the budget on the backs of America's most vulnerable parents and children.

Life for Griselda Almanza is not easy. She is a single mother in Oakland, California, with two young children. This year Almanza's life became much harder because budget cuts shut down the child-care program her sons attended while she worked as a house cleaner. Almanza thinks that she will have to quit her job. Many children of immigrants like Almanza's sons are losing a valuable opportunity to learn English and other subjects because of closing child-care centers.

Our children's future is in jeopardy because of large cuts to pre-kindergarten through 12th-grade education, higher education, and health programs benefiting children and because of continuing cuts in parents' incomes. About 40 percent of America's children under 18 are low-income, meaning their families earn less than twice the poverty level. This translates to a family income of about $44,000 a year for a family of four. About one-third of these children are non-Hispanic white.

Low-income children and particularly children of color have been hurt badly by this recession because their parents have suffered the highest rates of job loss. In August the unemployment rate for white-collar workers was 6.4 percent. The unemployment rate for workers in the service sector was 10.7 percent, and it was 13.7 percent for blue-collar workers. Workers with only a high school diploma were more than twice as likely to be unemployed as workers with a college degree. Among racial groups, black and Hispanic workers had the highest unemployment rates. Even blacks with a college degree were nearly twice as likely to be unemployed as were whites with a college degree.

Low-income people who have jobs are also hurting. Among workers with a high school diploma or less, 39 percent reported to the Pew Research Center that they were forced to work fewer hours, thereby reducing their take-home pay since the start of the recession. The rate for workers with college degrees was much less at 14 percent. For white workers, it was 22 percent. For Hispanics and blacks, it was 40 percent and 42 percent respectively, nearly twice as high.

On top of the burdens of prolonged joblessness and reduced work hours, low-income families are now being harmed by budget cuts. Parents who lose their jobs or who lose income and fall into economic hardship often end up turning to the government for help. The fiscal crises in state and local governments, however, are forcing these governments to cut jobs and services precisely when they are needed most, contributing to the long-term damage for the most vulnerable families.

Even before this prolonged recession, the United States ranked poorly in providing early childhood education. A 2008 UNICEF report placed the United States 20th out of 24 countries. In 2009, only 16 states provided enough funding to meet the quality standards defined by the National Institute for Early Education Research (NIEER). Nonetheless, our country had been making progress over the past decade -- progress which is now being reversed due to the fiscal crisis.

High-quality preschool and kindergarten can help disadvantaged children catch up academically to their more privileged peers. But after some modest progress, the U.S. is now going backward. NIEER reports that, adjusting for inflation, 24 states reduced their funding for pre-kindergarten in the 2008-2009 academic year. Quality full-day programs are being cut to weaker half-day programs. Some programs are being cut completely, and some previously free programs are now charging a fee. And deeper cuts are likely.

Early childhood education helps kids learn and allows a low-income parent to work without sacrificing a child's well-being. These reductions in early childhood education, therefore, hurt the child educationally, the household economically, and the family as a social unit.

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The full educational nightmare is unfolding right now in California, Almanza's state. Researchers have found that the more time students spend on educational tasks, the higher their academic achievement. But 16 of the largest school districts in California are shortening their school year to save money. Together these districts educate 1.4 million students.

Researchers have also found that for Hispanic and black students, when paired with good teachers, smaller classes can lead to higher academic achievement. Yet a survey by California Watch found that the majority of the state's 30 largest districts were increasing class size in kindergarten through third grade from 20 students to as many as 30 students. The state's superintendent of public instruction, Jack O'Connell, is worried that even shorter school days and larger class sizes are in California's future.

Although the horrible job market has spurred record numbers of California's youth to apply to college, the California budget crisis is shutting many of them out. Many will have difficulty paying the 32 percent increase in tuition in the University of California system or the 32 percent increase (over two years) in tuition in the California State University system. Those who can afford tuition may still be locked out. The University of California system has reduced its in-state student enrollment by 6 percent and plans to reduce it further this fall. The California State University system is planning to reduce its enrollment by 40,000 students over the next two years.

As goes California, so goes the nation. Thirty-three states and the District of Columbia have cut funding for kindergarten through 12th-grade education, and 43 states have cut higher education. The school year has been reduced in Hawaii and Utah. (After public outcry, Hawaii will undo the reduction in the current school year.) Efforts to reduce class sizes have stalled in Georgia, Virginia, and Washington. The public universities in Florida, Washington, and New York are all implementing substantial tuition increases. The University of Florida is also reducing its enrollment. The Nevada System of Higher Education is considering capping its enrollment for the first time.

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Low-income children's access to health care is also declining because of state budget cuts. Arizona has dropped 1 million low-income residents from the state Medicaid program. Health-care costs for 1 million children in California's Children's Health Insurance Program have increased. Pregnant women on Medicaid have lost coverage for over-the-counter medications and nutritional supplements in Connecticut. Washington is increasing the premiums for its health plan for low-income residents by 70 percent.

As low-income families suffer from record rates of job losses and declining work hours, their health-care costs are rising steeply. Higher costs will effectively push many low-income families out of health programs. Others, like the 1 million in Arizona, will simply be dropped.

In addition to the obvious vitality and longevity benefits, good health is also an important factor in children's educational performance, as former New York Times education columnist Richard Rothstein and others point out. For example, a child with a toothache cannot concentrate in class. A child with untreated vision or hearing problems will not do well in school. In an effort to save money, states are cutting from Medicaid "optional" benefits that are really fundamental, such as dental and vision care.

Good health care for very young children is also vital for their cognitive development. Research by the economist Kenneth Y. Chay and his colleagues show that "improved health in the first 3 years of life has long-term effects on human capital accumulation." The biggest reduction of the black-white test-score gap occurred during the 1980s. Chay finds that it was the improved access to health care for blacks in the South in the 1960s and 1970s following the civil-rights movement that led to significant improvement in black test scores. Now, low-income children's access to health care is declining.

Even before the Great Recession, many low-income Americans were experiencing declining living standards, and our shredded safety net was failing them. Although it is now clear that children's early childhood environment can have long-term effects, since the start of the 21st century, we've seen a worsening of the living conditions for young children. In 2000, the poverty rate for families with children under 6 years old was 15.4 percent. By 2007, the poverty rate for these families had increased 3.5 percentage points to 18.9 percent. Nearly one in five families with young children was raising their children under conditions of significant disadvantage.

Of course, since the recession, the situation has only worsened. Several states are reducing the amount of support they provide for low-income families. Arizona is cutting 10,000 families from a temporary cash-assistance program. California, Massachusetts, Ohio, and Texas are all reducing child-care subsidies. Connecticut is reducing its funding for child-abuse prevention programs.

The projection for the next fiscal year is for more deficits and more budget cuts. The Center on Budget and Policy Priorities estimates a collective state budget shortfall of $119 billion for the next fiscal year. This means that we are on track to see major budget cuts at the state level next year -- on top of the cuts we have seen for the past three years.

The federal government needs to step in and provide more aid to state and local governments. As my colleagues at the Economic Policy Institute Josh Bivens and Anna Turner have shown, in the not too distant past, the United States, Ireland, Finland, and Sweden all significantly reduced high levels of recession-induced debt with strong economic growth. So we should fear the prolonging of weak economic conditions far more than we should fear temporarily high debt levels. One way to restore America's prosperity is to invest in the education, health, and well-being of our most disadvantaged children.